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Managed Care Organizations (MCOs) and Prepaid Health Plans (PPHPs)

Revised: 12-28-2017

  • Overview
  • Additional Resources
  • Eligible Providers
  • Eligible Recipients
  • Excluded Recipients
  • Recipient Education and Enrollment
  • ID Cards
  • Changing MCOs
  • Transitioning from FFS to MCO
  • MCO Covered Services
  • Carve-out Services
  • Grievance, Appeal and Advocacy Procedures
  • MCO Notice of Action
  • MCO and State Appeal Rights
  • Legal References
  • Overview

    Most people eligible for Minnesota Health Care Programs (MHCP) are enrolled in managed care.

    DHS contracts with managed care organizations (MCOs) (including counties or groups of counties known as county-based purchasing or CBP) to provide health care services for MHCP recipients. MHCP recipients must enroll in one of these managed care products (unless excluded from enrollment):

  • • Medical Assistance (MA) and MinnesotaCare for families and children under age 65
  • • Minnesota SeniorCare Plus (MSC+)
  • • Minnesota Senior Health Option (MSHO)
  • • Special Needs BasicCare (SNBC)
  • Managed care organizations (MCOs) are organizations certified by the Minnesota Department of Health to provide all defined health care benefits to people enrolled in an MHCP in return for a capitated payment. MCOs are also referred to as health plans or prepaid health plans (PPHP).

    Each MCO:

  • • Determines its provider network
  • • Determines how services are delivered
  • • Determines which services require authorization or referral
  • • Determines its reimbursement rates to providers
  • • Determines additional benefits, if any, and alternative services that are cost effective and medically necessary to the needs of the recipient
  • • Pays only for medically necessary services
  • • May limit enrollees to services provided through its provider network
  • • May refer recipients to providers outside of its MCO network (the MCO is then responsible for payment of the services)
  • • Must cover recipient urgent or emergency care, including outside of the MCO's network or service area; nonemergency medical services are covered outside of the MCO’s service area or network and may require authorization by the MCO. The MCO must be contacted as soon as the provider is aware of the recipient's participation in an MCO
  • • Must cover open access services (family planning, diagnosis of infertility, testing and treatment of sexually transmitted infections, and testing for AIDS or other HIV related conditions) at any doctor, clinic, pharmacy or family planning agency even if the provider is not in the network
  • • Must have procedures for handling recipient grievances and appeals
  • Except as described in this section, MCOs are not obligated to pay for services provided outside their networks. Providers must follow the recipient’s MCO policies and procedures, including for authorizations and referrals, to receive payment for services.

    Additional Resources

  • Contact the MCO with provider questions about coverage or contract issues
  • • Direct recipients with questions as follows:
  • • MCO coverage or network questions – to their MCO member services
  • • Managed care enrollment for adults, families and children – to their county human services agency
  • • MinnesotaCare eligibility – to the MinnesotaCare Call Center at 651-297-3862 or 800-657-3672
  • • Seniors – to the Senior Linkage Line (SLL) at 800-333-2433
  • • People with disabilities – to the Disability Hub MN at 866-333-2466
  • • Trouble getting services – to the Managed Care Ombudsman Office at 800-657-3729 or 651-431-2660.
  • Eligible Providers

    Each MCO establishes its own provider network. Providers interested in providing medical care to MHCP recipients through the MCO:

  • • Must contact the specific MCO directly for information on contracting with them
  • • Are not required to enroll in MHCP to contract with an MCO
  • • Are responsible for all the terms of their MCO contracts
  • Providers also have the responsibility to:

  • • Seek payment from their contracted MCO; MHCP will not pay providers for services provided to recipients enrolled in an MCO except as noted in the Carve-out Services section
  • • Follow MCO guidelines and requirements for service authorization, referral, admission certification, coordination of benefits, second medical opinion, etc.
  • Eligible Recipients

    All MHCP MA recipients must enroll in an MCO, except those who have a basis for exclusion. Some recipients who are not required to enroll with an MCO may voluntarily enroll. All MinnesotaCare recipients must enroll in an MCO. Verify recipient eligibility and the MCO enrollment status through the MN–ITS Eligibility (270/271) transaction. Call the MCO directly with questions about recipient MCO coverage

    Coverage for recipients in a prepaid MCO is effective the first day of the next available month. Depending on when a recipient applies and is made eligible, MA recipients may be placed on fee-for-service (FFS) for a short period of time before they are enrolled in an MCO. MinnesotaCare recipients are enrolled in prepaid MCOs effective the first day of the month after the month eligibility is approved and a first premium payment is received, if a premium is required. The premium must be paid by the last business day of the month preceding enrollment to ensure coverage.

    Excluded Recipients

    MA recipients who meet certain criteria are excluded from enrollment into an MCO. For example, recipients in the Refugee Assistance Program and the Emergency MA program are never enrolled into MCOs. Some recipients have a basis for exclusion but may voluntarily enroll.

    Recipient Education and Enrollment

    MA recipients receive managed care education and enrollment from county staff. MinnesotaCare enrollees receive education and enrollment materials through the mail. Recipients are:

  • • Informed of their MCO options when they apply for MA or MinnesotaCare
  • • Encouraged to select an MCO (MCOs are assigned when not selected)
  • • Required to receive their health care services through their MCO network
  • For MSHO and SNBC, education is completed by mail, phone or in person. Recipients are enrolled through the state or MCO. Recipients may ask for help from the Senior Linkage Line (SLL) or Disability Hub MN about the various MCO options available.

    ID Cards

    In addition to their MHCP ID cards, recipients enrolled in an MCO also receive health plan member ID cards directly from their MCOs. Recipients are instructed to show both ID cards before receiving health care services.

    Changing MCOs

    Recipients may change MCOs in the following situations:

  • Once during the first year of initial enrollment, for any reason: To request this change, MA recipients must contact the county managed care enrollment office. MinnesotaCare recipients must contact the MinnesotaCare office. The change is effective for a future month
  • Within the first 90 days of initial MCO enrollment: This change option is available to recipients when they are initially enrolled in a MCO for 90 days or less.
  • During the annual health plan selection (AHPS) period: Recipients are notified by mail once a year of the opportunity to change MCOs during AHPS. Recipients who elect to change MCOs during AHPS are enrolled in the new MCO at a date determined by DHS. Generally, AHPS takes place in the fall and any changes in MCOs are effective January 1 of the following year. Recipients who do not respond to the mailing remain in their current MCO if it is still available.
  • • Following a permanent move outside of the MCO’s service area: The recipient must request a change within 60 days from the move date
  • • Following an MCOs unavailability in the a county: If an MCO no longer provides services in the recipient's county of residence, the recipient must select another MCO
  • For good cause: At any time, a recipient may request a change in MCOs for good cause, including: lack of access to services and providers, lack of access to a provider experienced in dealing with enrollee’s health care needs, or poor quality of care. Recipients must contact their county managed care advocate (DHS-6666) (PDF) or the State Ombudsman to request this change
  • MSHO and SNBC enrollees may change plans on a monthly basis.

    Transitioning from Fee-For-Service to MCO

    The following guidelines apply when recipients transition from FFS coverage to MCO enrollment.

    Authorized Services
    MHCP FFS covers both authorized services and services that do not require authorization only through the last day of a recipient's FFS eligibility.

    The MCO:

    • Must provide enrollees medically necessary covered services that another MCO or MHCP FFS had authorized before enrollment in the MCO

    • May require the enrollee to receive the services from an MCO network provider if that would not create an undue hardship on the enrollee

    Inpatient Status at MCO Enrollment
    Effective June 1, 2016, if a recipient is an inpatient in the hospital on the day the MCO enrollment is effective, the inpatient stay and ancillary services will continue to be covered by the previous coverage (either FFS or the previous MCO). The previous MCO or FFS in effect at the time of admission remains financially responsible for the inpatient hospital stay and for any related ancillary services until discharge from the hospital. The new MCO will be responsible for the services not related to the inpatient hospital stay beginning on the effective date of the enrollment. The same policy applies when a member changes from an MCO to FFS.

    Newborn MCO Enrollment
    A newborn whose mother is enrolled in an MCO at the time of delivery is retroactively enrolled for the birth month. Unless the newborn meets an exclusion from managed care (refer to basis of exclusion) the following applies:

  • • If the managed care enrollment is entered within 90 days of the birth, the newborn is enrolled in the same MCO as the mother for the month of birth and succeeding months unless an MCO change is requested for the succeeding months.
  • • If the managed care enrollment is entered after 90 days from the date of the birth, the newborn is enrolled in an MCO for the birth month and then re-enrolled in the same MCO for the next available month unless an MCO change is requested for the future months.
  • A newborn will be enrolled in the same MCO as the mother for MA for families and children if the MCO is available. If the health plan is not available, the baby will be FFS.

    This policy also applies to a baby born to a woman enrolled in SNBC.

    Ongoing Services
    If a recipient is receiving ongoing medical services, such as mental health services, and the provider is not in the network of the recipient’s MCO, the provider must contact the recipient’s MCO for authorization to continue the service. Under some circumstances, the MCO may continue to authorize services by the non-participating provider, or may authorize a limited number of visits. Under some circumstances, the MCO will develop a transition plan, which will require the recipient to change to a provider in the MCO network.

    MCO Covered Services

    Unless services are not included in the MCO contract (Carve-out Services) MCOs are required to provide all medically necessary health services covered under the contract, which include these access services:

  • • Interpreter services: contact the MCO or their participating clinic to arrange sign or spoken language interpreter services.
  • • Nonemergency Medical Transportation (NEMT) (bus, cab, volunteer driver): when required by contract, MCOs must provide nonemergency medical transportation for their MSC+, MSHO, Families and Children, MinnesotaCare (under age 21) and SNBC enrollees who have no other means of transportation to their medical appointments. Enrollees may contact their MCO to arrange a ride.
  • For reimbursement for meals, lodging, parking, personal mileage and out-of-state transportation:

  • • In the -counties coordinated by MNET, Anoka, Benton, Chisago, Dakota, Hennepin, Isanti, Ramsey, Sherburne, Stearns, Washington, and Wright, MCO enrollees must contact MNET
  • • In counties outside the MNET counties, MCO enrollees must contact their local county human service or tribal agency
  • Managed care enrollees may access services outside their MCO networks without authorization for the following services:

  • • Family planning
  • • Indian Health Services (IHS) facility or tribal provider
  • • Medical emergency
  • Carve-out Services

    Some services are “carved-out” of MCO coverage and are covered through FFS MHCP. Bill the following services to MHCP directly:

  • • Abortion services
  • • Waiver services under BI, CAC, CADI, DD and EW except when the MCO recipient is enrolled in MSC+ and MSHO; bill EW services to the MCO
  • • Child Welfare-Targeted Case Management (CW-TCM)
  • • DD case management
  • • ICF/DD
  • • Individual Education Plan (IEP) or Individual Family Service Plan (IFSP) services provided by school districts
  • • Nursing facility per diems except for certain MSHO, MSC+ and SNBC enrollees.
  • • PCA and Home care nursing (HCN) services for SNBC enrollees
  • • Relocation service coordination (RSC) for SNBC enrollees
  • Grievance, Appeal and Advocacy Procedures

    For help resolving MCO or provider complaints, MCO enrollees may contact:

  • • Their county managed care advocates
  • • The Ombudsman's Office for State Managed Health Care Programs
  • • The Minnesota Department of Health or the appropriate licensing board
  • A provider, acting on behalf of the recipient and with the recipient's written consent, may file an appeal with the MCO or request a State Fair Hearing.

    MCO Notice of Action

    MCOs must notify their enrolled recipients with a written notice of denial of payment or the denial, termination or reduction (DTR) of services that the recipient or the recipient's health care provider requested. This notice contains the following information:

  • • The action the MCO is taking
  • • The reason the MCO is taking this action
  • • The state and federal laws or MCO policies that support the MCO's action
  • • The process the recipient must follow to file a grievance or an appeal with the MCO and/or the State
  • MCO and State Appeal Rights

    If the recipient disagrees with the MCO action, the recipient may choose to appeal to the MCO or request a State Fair Hearing, or both (the recipient does not have to finish one process before using another). The recipient must file:

  • • The appeal with the MCO within 90 days from the date of notification to deny, terminate or reduce services or deny payment, in whole or part
  • • The request for a State Fair Hearing within 30 days of the date on the notice of action from the MCO or the date of the MCO decision on appeal. Recipients may appeal to the state up to 90 days after receipt of the MCO decision if they have good cause.
  • When an MCO reduces or terminates ongoing medical services that the recipient's MCO physician or another physician authorized by the MCO has ordered, and the recipient has filed an appeal with the MCO or with the state within ten days after receiving notice, or before the date of the proposed action, whichever is later:

  • • The recipient may request a continuation of benefits. The provider must agree to continue the benefits.
  • • The MCO must pay for the disputed services that the recipient receives while the appeal is pending. If the appeal is subsequently not upheld, the recipient may be held responsible for paying for the disputed service(s) that was provided while the appeal was pending
  • • If the recipient has a complaint that is urgent, the recipient may ask the MCO (in a health plan appeal) or the Human Services Judge (in State Fair Hearings) for an fast appeal
  • Legal References

    Minnesota Statutes 256B.69 Prepaid Health Plans
    Minnesota Statutes 256D.03
    Responsibility to Provide General Assistance
    Minnesota Statutes 256L.12
    Managed Care
    Minnesota Statutes 62D
    Health Maintenance Organizations
    Minnesota Statutes 62M
    Utilization Review of Health Care
    Minnesota Statutes 62N
    Community Integrated Service Network
    Minnesota Statutes 62Q
    Health Plan Companies
    Minnesota Statutes 62T
    Community Purchasing Arrangements
    Minnesota Rules 9500.1450 to 9500.1464
    Administration of the Prepaid Medical Assistance Program
    Minnesota Rules 9505.0285
    Health Care Prepayment Plans or Prepaid Health Plans
    Minnesota Rules 9506.0200
    Prepaid MinnesotaCare Program; General
    Minnesota Rules 9506.0300
    Health Plan Services; Payment
    Minnesota Rules 9506.0400
    Other Managed Care Health Plan Obligations
    42 CFR 431
    State organization and general administration
    42 CFR 438
    Managed care

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